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Ann Barnhardt calls this phenomenon of multiple layers of middle management making big salaries doing nothing productive (actually, in many cases, hampering productivity) "middle-class shadow welfare projects". The government funds these universities (and other enterprises) so they can create these matrices of do-nothing bureaucrats to offset the jobs in manufacturing and industry that have been shipped overseas:

" These companies, as they operate today, have at least TEN LEVELS of largely unnecessary, redundant and even detrimental "management" between the scientists and engineers who are actually doing productive work and the actual upper management of the company. Further, these ten levels of "management" are each low six-figure positions. We're not talking ten levels of redundant janitorial staff at $12.00 per hour. We're talking TEN LAYERS of $100k-$250k positions.

And these people do basically nothing that is genuinely productive. In fact, they slow down the process of genuine development and productivity, hamstringing and bogging-down the work of the actual engineers and computer scientists who, ironically, dwell at the absolute BOTTOM of the corporate structure.

Because of this massive bloat in man-hours and horrifically reduced productivity, .gov is billed AT LEAST ten times, and it may be closer to twenty times, what it should be billed by these defense contractors to achieve the same results and innovation.

But before you pick up your torches and pitchforks, please understand that this is exactly what .gov WANTS. Like I said, this is all a massive middle-class shadow welfare system. The .gov explicitly drove these defense contractors into these uber-bloated management regimes in order to provide middle-class jobs. The sub-urbs of the Denver metro area and all other cities which have a sizable defense industry presence, are filled with these defense "management" employees. In other words, these are people who are totally dependent on .gov for their paychecks, and whose jobs are completely, totally unnecessary and have a negative net impact on productivity. Yay. Go America.

Defense is not the only area in the economy where these massive shadow welfare paradigms exist. As Warren Pollock pointed out in one of our YouTube conversations, almost all of the so-called "compliance" positions in the financial services and banking sectors are completely unnecessary and counter-productive. It could also be argued, and argued very, very well that around 97% of the accounting industry is also a .gov shadow welfare project revolving around nothing but the payment of federal income taxes, which shouldn't even exist in the first place. And finally, we should all understand that most of the health insurance industry is nothing but a .gov shadow welfare matrix. Health insurance should be catastrophic coverage only, and thus have an extremely small and streamlined back office labor requirement.

Why? Why did .gov do this? Because almost all of the true manufacturing jobs in the United States have been sent overseas. We MAKE very, very little actual, physical stuff here relative to population and consumption. This economy is now almost entirely a SERVICE economy. Sixty years ago all of the people who are today working in "management" in these defense companies and the other government-created shadow welfare paradigms were working in manufacturing, some in management, and some in actual fabrication."

She was talking of defense contractors, but any government-funded enterprise is basically the same. Lots and lots of bloat in the middle management, with the full complicity of the government. Her solution? "The only reason the defense contractors are creating these ridiculous management matrices is because the money is flowing from .gov to do it. Take away the money and the corporations will streamline almost overnight. Management levels 2-8 will suddenly, miraculously, almost as if in an epiphany, be recognized as non-essential."

I'll bet that Purdue is a 501c3 Corporation.
Here's a thought. Lets tax all pay and benefits over $200,000 of those working for 501 class tax exempt organizations so that they are paying the same taxes as all the other rich people.
Too many 501 class organizations have become a tax dodge that allows the organization to have massive earnings that are then channeled directly into the pockets of favorably placed individuals within the organization. The purpose of 501 class organizations isn't supposed to be to provide a cushy living for those fortunate enough to have a position there but to provide some sort of recognized and identifiable public benefit.
To many people are getting a nearly free ride while those who are supposed to receive the benefit of the organization [in this case a university] are facing increasing fees and reductions of services.